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1 Illinois Farmers Insurance Company v The Metropolitan Water Reclamation District of Greater Chicago. Author: Tanya Sinha This Climate Planning Summary Paper provides a snapshot of a recent climate change-related class action filed by an insurer in the US against approximately 100 cities, villages and townships in the greater Chicago region (Cook County). The plaintiff seeks compensatory damages for negligent maintenance, failure to remedy known dangerous conditions, and illegal seizure of private property. This action highlights the potential cascading risks associated with climate change and serves as a wake-up call for all local governments and those who insure them. Illinois Farmers Insurance Company v The Metropolitan Water Reclamation District of Greater Chicago I. PARTIES The plaintiff is Illinois Farmers Insurance Company, all of its subsidiaries and insured persons. 1 The total number of effected homes and businesses insured by Farmers Insurance Company exceeds The defendant is approximately 100 cities, villages and townships in the Cook County region, including the City of Chicago and the Metropolitan Water Reclamation District of Greater Chicago (Reclamation District), an independent state agency. 3 In 2004, Public Act of the Illinois General Assembly imposed sole responsibility upon the Reclamation District to supervise and coordinate stormwater management across municipalities. 4 II. THE EVENT During April 17 and April 18, 2013 more than 175mm (seven inches) of rain fell across Cook County causing the county to declare a state of emergency and issue a flood warning. It was later noted that April 2013 set a record as Chicago s wettest April in history 5. II. PLAINTIFF s CLAIMS The plaintiff has filed a request for a class action and jury trial against the defendant over economic losses arising from sewer water invasions sustained by the plaintiff. The plaintiff claims the damages were caused by the defendant s negligence to adopt reasonable stormwater management practices ahead of the heavy rainfall on April 17 and/or April 18, The plaintiff seeks compensatory damages for negligent maintenance, failure to remedy known dangerous conditions, and illegal seizure of private property. No specific value has been referred to in the filing. 1. Factual Claims The plaintiff relies on the following factual claims in its submission. A. Defendant had Ownership, Operation and Control of Sewers Each municipal defendant discharged sanitary water (also known as grey water) from their local sanitary water sewer system into the regional sanitary water sewers, which was owned, operated and controlled by the Reclamation District. 6 B. Defendant had knowledge of Detailed Watershed Plans Prior to the events of April 2013, defects in the defendant s stormwater sewer system caused stormwater sewer invasions within the territorial boundaries of several municipality defendants from Illinois Farmers Insurance Company v The Metropolitan Water Reclamation District of Greater Chicago 1

2 August 2009 to January The Reclamation District led investigations into these defects and published six detailed Watershed plans for each effected municipality defendant. 8 C. Defendant had knowledge of Watershed Management Defects The Watershed plans outlined the following hazards posed by the management defects known to each municipal defendant: i. Failure to provide safe, adequate mitigation storage to prevent stormwater invasions of the plaintiff s properties. 9 ii. iii. iv. Failure to provide safe, adequate stormwater control storage including but not limited to raising the banks and discharge culvert elevations for retention basins, detention basins and other stormwater storage structures within the watershed, sub watershed, and/or stormwater sewer system. 10 Failure to provide safe, adequate mitigation conveyance for stormwater. 11 Failure to provide safe, adequate barriers such as temporary and/or permanent levees to protect plaintiffs properties from stormwater. 12 v. Failure to pump down stormwater storage basins, sewers and/or structures. 13 D. Defendant had knowledge of Temporary Remedies On April 15 and/or April 16, 2013 the Reclamation District began to pump out sewer water collected in its Tunnel and Reservoir Plan (TARP) tunnels and reservoirs with the knowledge that the approaching rainfall on April 17 and/or April 18, 2013 would cause sewer water invasions of the plaintiff s properties. 14 The defendant could have remedied these known stormwater system defects by pre-rainfall cost-effective operational practices such as temporarily increasing existing stormwater basin storage and conveyance capacity. 15 E. Defendant had knowledge of climate change effects In 2008 the Reclamation District, County of Cook, City of Chicago and other municipal defendants adopted the Chicago Climate Action Plan (CCAP) which acknowledged the link between climate change increases in rainfall amount, intensity and duration. 16 The defendant should have known that climate change in Cook County would intensify rainfall patterns, causing greater stormwater runoff in Cook County and its Watersheds. 17 The defendant failed to take action to increase its stormwater storage capacity to prevent sewer water invasions, which it knew would occur at a greater rate and intensity due to climate change. 18 F. Defendant had knowledge of approaching April 17 and/or April 18 Rainfall. The defendant knew or should have known that the rainfall was approaching Cook County Watersheds. They had adequate time and opportunity to plan and take actions before the rainfall to increase stormwater storage and transportation capacity within its stormwater system. 19 G. Defendant failed to implement reasonable pre-storm practices The defendant failed to adopt and implement policies that would maximise stormwater storage capacity before, during and after April 17 and/or April 18 and prevent injury to the plaintiff. The pumping of the TARP tunnel and reservoirs on April 15 and/or April 16 only pumped out pre-existing collected water, but no specific actions were undertaken during this time to maximise capacity and rectify the known defects outlined in the Watershed plans. H. The Defendant Could have reasonably managed the April 17 and/or April 18 Rainfall The April 17 and/or April 18 rainfall was: 20 i. Reasonably manageable by the defendant ii. Was an ordinary rainfall in the experience of the defendant and the historical experience of the Cook County. iii. Was reasonably foreseeable rainfall. iv. Was not an Act of God unknown and/or unexperienced by the defendant. v. The rainfall was within the 100-year rainfall return frequency stipulated by the Reclamation District s Stormwater Management Ordinance. vi. In the alternative, the rainfall was within the climate-change adjusted 100 year rainfall return frequency recalculated under the Chicago Climate Action Plan. Illinois Farmers Insurance Company v The Metropolitan Water Reclamation District of Greater Chicago 2

3 2. Legal Claims The plaintiff submits two negligence claims, one constitutional claim and an action for damages. A. Negligent Maintenance In their first negligence claim, the plaintiff submits: Duty of Care That as a local public entity the municipal defendant was under a statutory duty to safely and properly exercise ordinary care to maintain and operate its sewer properties in a reasonably safe condition under section 3-102(A), Local Governmental and Governmental Employees Tort Immunity Act. 21 The municipal defendant owed this duty to the insured members of the plaintiff as they were being serviced by the municipal defendant s sewers. 22 Breach of Duty The defendant negligently breached their statutory duty by failing to adopt measures that would provide safe, adequate mitigation and stormwater storage and conveyance. The defendant had foreseeable knowledge that the plaintiff would be injured by breaches of its statutory duty, due to prior sewer invasion events which created a known risk to the plaintiff s properties and to their health, safety and welfare. The defendant also had actual or constructive notice of the existing sewer defects from prior sewer water invasions, investigations and the detailed Watershed plans. 23 The magnitude of the harm caused as a result of improper management of the sewer system was reasonably foreseeable and outweighed the practicability and cost of rectification. 24 Causation But for the defendant s failures to properly manage storm sewer water in accordance with its regulatory duty, sewer water would not have escaped from the defendant s sewers, invading and causing harm to the plaintiff s properties. 25 Remoteness The defendant s omissions were the direct, immediate, substantial and material cause of stormwater escaping and invading the properties of the plaintiff, therefore the harm caused was not remote. B. Failure to Remedy known Dangerous Conditions In their second negligence claim the plaintiff submits: Duty of Care The municipal defendant was under a statutory duty to remedy the unsafe conditions and defects outlined in the Watershed plan under section 3-102(A), Local Governmental and Governmental Employees Tort Immunity Act. 26 Breach of Duty The municipal defendant knew that the existing stormwater system created unreasonable and dangerous conditions to the plaintiff. 27 The defendant negligently breached their statutory duty to remedy the known defects and adopt measures that would provide safe, adequate mitigation and stormwater storage and conveyance. It was reasonably foreseeable the risk of damage to the plaintiff would occur where the defendant failed to remedy known defects. Causation As submitted in claim A. Remoteness As submitted in claim A. C. Violation of Illinois Constitution Art 1, Sec. 15 and Fifth Amendment to the United States Constitution. The plaintiff s third claim is that the defendant violated the plaintiff s constitutional right of dominion and control over their real properties, including their personal properties without just compensation. Art 1, Sec. 15 of the Illinois Constitution and the Fifth Amendment to the United States Constitution prohibit Illinois Farmers Insurance Company v The Metropolitan Water Reclamation District of Greater Chicago 3

4 the taking of private property for public use without payment of just compensation to the citizen whose property was taken. 28 The plaintiff submits that the defendant without providing for just compensation used the properties of the plaintiff for public use as retention basins, detention basins and/or other storage structures for the defendant s stormwater and sanitary water. 29 This unjustifiably and unlawfully, interfered, hindered and prevented plaintiffs from their exclusive right to use their properties for their intended purposes as guaranteed by the Illinois and United States Constitution. 30 It was also a permanent and substantial interference with the plaintiff s use and enjoyment of their real and personal properties as it resulted in a substantial reduction if not total destruction of their market value. 31 D. Damages The plaintiff seeks an action in compensatory damages in excess of the jurisdictional minimum of the Circuit Court of Cook County for economic losses sustained; including monies paid to their insured s, incurred evacuation costs, uninsured losses to real and personal properties and out of pocket expenses including time and effort costs incurred during the clean-up. 32 Endnotes 1. p.6 [8] 2. p.14 [26] 3. p.7 4. p.9 [16] 5. NOAA (2013) available from display_cmsstory.php?wfo=lot&storyid=94115&source=0 6. p.15 [34-35] 7. p p.16 [38] See plans here: https://www.mwrd.org/irj/portal/ anonymous/stormwateroverview 9. p.18[40.1] 10. p.19 [40.2] 11. p.19 [40.3] 12. p.19 [40.5] 13. p.19 [40.8] 14. p.19 [45] 15. p.19 [ ] 16. p.20 [49] 17. p.20 [50] 18. p.21 [51] 19. p.21 [52-53] 20. p ILCS S3-102(A) 22. p.25 [69] 23. p.26 [71] 24. p.26 [72] 25. p.28 [74] ILCS 3-102(A) 27. p.29 [82] 28. p.33 [95] 29. p.34 [98] 30. p.34 [99] 31. p.34 [100] 32. p Climate Planning is a botique consultancy that has a proven track record of providing climate change adaptation services. We have undertaken over 70 climate change risk and adaptation projects and maintain a diverse portfolio of clients. Climate Planning specialises in mainstreaming adaptation into organisations and has worked with Federal, State and Local Governments, insurers, property developers, infrastructure providers, research groups and UN agencies. Illinois Farmers Insurance Company v The Metropolitan Water Reclamation District of Greater Chicago 4

5 Illinois Farmers Insurance Company v The Metropolitan Water Reclamation District of Greater Chicago 5

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